165 Ohio App. 3d 502 | Ohio Ct. App. | 2006
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *504 {¶ 1} Appellant, Mark A. Nye, appeals from a judgment of the Franklin County Court of Common Pleas affirming an order of the state of Ohio Board of Examiners of Architects that revoked appellant's certificate of qualification to practice architecture in Ohio. Appellant assigns a single error:
*505 Because the board did not err in applying the doctrine of collateral estoppel, we affirm.The trial court erred in failing to reverse the decision of the State of Ohio Board of Examiners of Architects because the Board erroneously deemed Appellant's admissions, contained within a confidential agreement entered into in connection with the settlement of an unrelated civil matter, to be binding and irrefutable evidence of profession misconduct.
{¶ 2} In May 1999, Redeemer Lutheran Church ("RLC") entered into contracts with CM Architects, Inc. ("CMA") and CM Architects Master Builders, Inc. ("CMB"), corporations that appellant owned and operated. Pursuant to the contracts, appellant was to design, improve, and expand the church for a total cost of $638,000. Construction began in June, and over the next few months, RLC paid appellant $532,583, or 80 percent of the contract price. In December, a dispute about the progress payment schedule prompted CMB to pull its workers and equipment from the construction site.
{¶ 3} RLC filed two lawsuits against appellant, CMA, and CMB in the Franklin County Court of Common Pleas, alleging fraudulent transfer of assets, misstatements made with fraudulent intent, and fraudulent actions involving the creation of corporations for illegal purposes and breach of contract. The cases were consolidated, and in December 2002, RLC and appellant entered into a settlement agreement in which appellant admitted to all the allegations contained in RLC's two complaints. Particularly relevant here, appellant specifically admitted to fraud, fraudulent transfers, and conduct preventing the discharge of debt under the bankruptcy code.
{¶ 4} The settlement agreement, by its very terms and by court order, was incorporated into an agreed judgment entry that the common pleas court issued. In addition to incorporating the terms of the settlement agreement, the entry awarded RLC $110,000 on its claims against appellant and expressly stated that the entry "constitutes a finding of fact and law regarding the substantive merits of each of [RLC's] underlying claims."
{¶ 5} On August 6, 2003, RLC filed a complaint with the board requesting that the board revoke or suspend appellant's license to practice architecture because appellant had committed various acts of fraud, deceit, and misconduct in renovating RLC's church. After the board received RLC's complaint against appellant, it began an investigation into the allegations and subpoenaed the settlement agreement. Based exclusively on the information contained in the settlement agreement, the board notified appellant that the board was taking action against his certificate of qualification to practice architecture.
{¶ 6} Pursuant to R.C. Chapter 119, appellant requested and received an administrative hearing. On June 3, 2004, and July 13, 2004, the hearing officer conducted a hearing that included the testimony of Chad Holland, the board's investigator, Allan Debelak, Pastor of RLC, and appellant. Among the documentary evidence admitted during the hearing were the agreed judgment entry, the settlement agreement, and the complaints that RLC had filed against appellant in the common pleas court. *506
{¶ 7} Based on the evidence, the hearing officer issued a report and Recommendation in which he found that appellant had violated Ohio Adm. Code
{¶ 8} Premised on the noted violations, the hearing officer recommended that the board suspend appellant's architecture license indefinitely and for a period of not less than one year, but to hold in abeyance all but 30 days of that suspension provided appellant complete continuing education courses and honor his restitution agreement with RLC. The board issued an order adopting the findings of fact, conclusions of law, and summary of conclusions in the hearing officer's report and recommendation, but the board rejected the hearing officer's recommendation and instead revoked appellant's license to practice architecture.
{¶ 9} Pursuant to R.C.
{¶ 10} Under R.C.
{¶ 11} An appellate court's review of an administrative decision is more limited than that of a common pleas court. Ponsv. Ohio State Med. Bd. (1993),
{¶ 12} Here, appellant contends that the common pleas court erred in affirming the board's order that improperly applied the doctrine of res judicata and deemed appellant's admissions in the settlement agreement in the previous civil matter to be conclusively binding evidence in the proceedings before the board. Because the applicability of res judicata is a question of law, this court utilizes a de novo standard of review. PrairieTwp. Bd. of Trustees v. Ross, Franklin App. No. 03AP-509,
{¶ 13} The doctrine of res judicata includes two separate concepts: (1) claim preclusion, historically called estoppel by judgment, and (2) issue preclusion, traditionally called collateral estoppel. Grava v. Parkman Twp. (1995),
{¶ 14} Before we address the specifics of appellant's argument, we first note that the agreed judgment entry was issued by the Franklin County Court of Common Pleas, a court of competent jurisdiction. Moreover, because appellant's factual admissions were incorporated into the agreed judgment entry, RLC's civil action is deemed actually litigated and determined.Columbus v. Alden E. Stilson Assoc. (1993),
{¶ 15} Appellant nonetheless claims that some of the requirements for applying collateral estoppel are absent on this record. While acknowledging the facts he admitted in the agreed judgment entry, appellant contends that the board misapplied the doctrine of collateral estoppel because the board was not a party to the civil action giving rise to the admissions. Mutuality of parties generally is a requisite to collateral estoppel, so that collateral estoppel operates only when all of the parties to the present proceedings were bound by the prior judgment. In order to preclude either party from relitigating an issue, a judgment must be preclusive upon both. Goodson v. McDonough Power Equip.,Inc. (1983),
{¶ 16} In Hicks, the Ohio Supreme Court used nonmutual offensive collateral estoppel to preclude the city of Cincinnati from relitigating the issue of its ownership and control of a hospital when that issue was determined in a prior case in which the city was a party. More specifically, in Hicks, the city sought to argue that it had immunity from liability because Cincinnati General Hospital was a state-owned facility. Yet in the prior case, the city took the opposite position and argued, as the court found, that the city owned, operated, and controlled the hospital. Id. at 74, 6 O.O.3d 274,
{¶ 17} Here, like the city in Hicks, appellant seeks to contest in his hearing before the board the validity of the facts and specific issues contained in the agreed judgment entry when, in the previous civil action, appellant freely admitted those facts. Although the previous civil litigation also established appellant's liability, appellant's ultimate liability in the previous action was not the issue in the board's administrative determination; instead, the board applied collateral estoppel to the "operative facts" from the prior civil litigation. SeeGoodson,
{¶ 18} Because appellant did not lack the full and fair opportunity to litigate the facts in the prior civil litigation, and because appellant was not precluded from litigating whether the admitted facts from the prior civil litigation warranted the revocation of his architectural license, the trial court did not err in affirming the board's use of offensive collateral estoppel to give conclusive effect to appellant's prior admissions, even though the board was not a party in the prior civil litigation. To find otherwise would be to allow a party to manipulate the judicial system in a manner Goodson deemed inappropriate.
{¶ 19} Moreover, since Goodson, the Ohio Supreme Court has expanded the mutuality-of-parties requirement to include not only the parties and their privities but also a mutuality of interest, including an identity of interest in the desired result. Brownv. Dayton (2000),
{¶ 20} Appellant, however, notes several exceptions that have caused the Supreme Court to refuse to apply collateral estoppel, even when the mutuality requirement is met. See Statev. Williams (1996),
{¶ 21} Under the perimeters of Williams, appellant contends that he should be able to relitigate the admitted facts because (1) he thought the settlement agreement would be kept confidential and he did not anticipate its use in prospective litigation and (2) he did not have an incentive to fully litigate the civil action because he was under considerable financial pressure to settle.
{¶ 22} Initially, although the settlement agreement generally was confidential by its terms, the agreement included a clause that allowed for disclosure if RLC or appellant "require[s] use of this Agreement for evidence or otherwise in litigation, bankruptcy proceeding or other court proceeding." The clause thus allows either party to use the terms of the agreement, including appellant's admissions, in subsequent proceedings such as those before the board. At the same time, the clause serves notice of the settlement agreement's potential to be used in future litigation. Because the very terms of the settlement agreement expressly and objectively refute appellant's subjective belief that the agreement was confidential and would not be used in prospective litigation, appellant's first argument is unpersuasive.
{¶ 23} Appellant next claims that financial duress prevented him from fully and vigorously litigating the initial civil action. Appellant's financial duress, however, did not occur "as a result of the conduct of his adversary or other special circumstances." Williams,
{¶ 24} Because the requirements for collateral estoppel are satisfied and because no recognized policy exception prevents its application, appellant's admissions in the initial civil actions were binding and conclusive upon appellant in the proceedings before the board. Accordingly, for the reasons stated in this opinion, we overrule appellant's single assignment of error and affirm the judgment of the common pleas court.
Judgment affirmed.
*511PETREE and FRENCH, JJ., concur.